What changed
RBI issued a consolidated version of the NBFC Auditor’s Report Directions 2008, incorporating all amendments up to June 30, 2012. The updated notification supersedes the earlier 1998 directions and provides a single reference for auditor reporting requirements.
What it means for you
NBFC auditors must now include a separate report to the board on specific regulatory compliance matters, including whether the company holds a valid Certificate of Registration and meets asset/income pattern criteria. This enhances supervisory oversight and ensures auditors flag any non-compliance directly to the board.
What you must do
- Ensure auditors are aware of the updated Directions and the requirement for a separate report to the board.
- Verify that your NBFC's asset/income pattern as on March 31 each year meets the conditions for retaining the Certificate of Registration.
- Review the auditor's additional report for any unfavourable or qualified statements and address them promptly.
- Maintain records of auditor reports as per the Directions for RBI inspection readiness.
Who it affects
All Non-Banking Financial Companies (except Residuary NBFCs and Miscellaneous NBFCs), Auditors of NBFCs, Board of Directors of NBFCs
What is the key change in the 2012 updated Directions?
The Directions consolidate all amendments up to June 30, 2012 into a single notification, replacing the 1998 version. The core requirement remains: auditors must submit an additional report to the board on specific regulatory matters.
Does this apply to all NBFCs?
It applies to all NBFCs as defined under Section 45I(f) of the RBI Act, except Residuary Non-Banking Companies and Miscellaneous Non-Banking Companies.
What must the auditor report on regarding the Certificate of Registration?
The auditor must state whether the NBFC holds a valid CoR and whether it is entitled to continue holding it based on its asset/income pattern as on March 31 of the applicable year.